The Tech Skills Gap Will Test Foxconn's New Wisconsin Factory

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The Tech Skills Gap Will Test Foxconn's New Wisconsin Factory

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Taiwanese electronics juggernaut and leading Apple supplier Foxconn announced Wednesday that it intends to invest $10 billion in a new manufacturing plant in Wisconsin, where it plans to make LCD panels bound for computers, healthcare devices, and even vehicles. The White House touted the announcement as a victory for senior adviser Jared Kushner’s Office of American Innovation, and marked it as a milestone in President Trump’s promise to bring manufacturing back to the United States.

"Foxconn joins a growing list of industry leaders who understand that America's capabilities are limitless and that America's workers are unmatched," President Trump said at the White House announcement, flanked by House Speaker Paul Ryan, Wisconsin governor Scott Walker, and Foxconn chairman Terry Gou.

Yet, the 3,000 jobs Foxconn says it will create in Wisconsin aren’t the kind of manufacturing jobs that so many laid off auto and steel workers have been clamoring for. Nor are they a pathway to the American-made iPhone President Trump promised during the 2016 election. They are, instead, part of a new generation of advanced manufacturing jobs, requiring high levels of engineering skills—skills that are still sorely lacking in the American workforce.

Though all of that sounds pessimistic, it could be great for American workers, if it's coupled with appropriate skills training. Certainly, investing in advanced manufacturing is smarter than trying to slap a Made in America sticker on every iPhone, as President Trump wants to do. Such a move would require building an entire supply chain of the kind of low-skill assembly line jobs that Apple now offshores to countries like China. No livable wage in the United States could ever compete. If iPhones were made entirely in America, their sticker price would skyrocket. And building one-off American factories, even factories belonging to a supplier as critical as Foxconn, won't change the overall landscape of a company like Apple’s supply chain. As it stands, it's unclear whether the company will even source its LCD panels from the Wisconsin factory. Even if it did "there are thousands of parts that go into making an iPhone,” says Jason Dedrick, a professor at the school of information studies at Syracuse University, who has studied Apple’s supply chain extensively. “Even though this is an important one, it would take a lot more to have a supply chain in the US.”

With this announcement, Foxconn could play a role in supplying the high-skilled advanced manufacturing work people want. According to one 2016 White House report, over the next decade, the United States will need to fill 3.5 million advanced manufacturing jobs. And yet, that same report predicts that some 2 million of those jobs will go unfilled because of the skills gap in the United States. New plants of this sort won't work unless the government funds training programs to make sure people have the skills to do the job.

During the announcement today, President Trump, Governor Walker, and Speaker Ryan all framed Foxconn's decision as evidence of a promise kept to Trump voters in the Rust Belt. "One thing we know about this President is how committed he is to reviving American manufacturing and bringing jobs home," said Ryan. "This here shows actual results." But Rust Belt voters would be misled if they believed their factory experience is easily translatable to the tech-driven jobs this rising industry requires or that factories like this one will ever employ nearly as many people as the old steel town factories once did.

"These are going to be high-level engineering jobs, but we have a shortage of engineers," says Stefanie Lenway, dean of the Opus College of Business at the University of St. Thomas and author of Managing New Industry Creation. "It's a job for physicists, for electrical engineers, and mechanical engineers." And, Lenway adds, for robots. Manufacturing LCD panels is, unlike traditional factory jobs, incredibly clean work. A speck of dust can destroy the product, Lenway explains. And so, most manufacturers employ robots to do the fabrication, with just a few human beings, covered head to toe, completing essential tasks.

What concerns Lenway even more than all of this is the fact that $10 billion will take a long time for Foxconn to spend, and by the time it does, she says, "the plant they're running could be obsolete." That could lead to layoffs or people training for jobs that don't exist.

Though Apple is Foxconn's most high-profile customer, it didn’t participate in the unveiling at the White House. But Apple has recently launched its attempt at spurring advanced manufacturing in America. In May, Apple CEO Tim Cook announced the company is launching a $1 billion fund to invest in advanced manufacturing companies in the United States. Its first $200 million went to Corning, which will use the money to expand research and development of its glass material.

This, Lenway says, makes more sense, given that Corning's intellectual property—and talent—have always been based in the United States. "It’s all about owning the knowledge networks," Lenway says.

All of this assumes that Foxconn will actually follow through on its promise to build the plant and hire those skilled workers. In 2013, the company committed to spending $30 million on a new factory in Pennsylvania that never materialized. If the plant in Wisconsin does come to be, it will be up to the Trump administration to ensure the country is also investing in training programs that prepare American workers for the jobs it offers. Otherwise, what they are celebrating today as the greatest investment in job creation in Wisconsin's history could become a great waste.